EUR/GBP: more two-way business on Brexit jitters

Currently, EUR/GBP is trading at 0.8895, down -0.05% on the day, having posted a daily high at 0.8910 and low at 0.8856.

EUR/GBP has seen some good two-way business on a critical week for the cross, ahead of key data releases and the EU summit. EUR/GBP hit 0.8856 on stops in early European trade, moved to 0.8876 and then attracted further demand to 0.8907 before sent back to 0.8881 ahead of another rebound to 0.8898. There are no particular catalysts for the move, although headlines crossing and fearmongering in the media around the Brexit deadlock are keeping traders nervous.

A Bloomberg report, noting the Brexit negotiations could be headed for a catastrophic breakdown if the EU refuses to compromise hit sterling hard earlier, for example. 

UK: Economy subjected to political considerations - BBH

The September CPI figures and the UK labour market report due on the 17th and 18th October will be key in determining just how possible a BoE hike might be, (EU summit is also key for the cross). Eyes will be with the German data and ECB sentiment / and euro rates also. 

EUR/GBP levels

On the way down, the next major band of support extends from the 14th July low at 0.8748 to 0.8720 being the 2015-2017 uptrend and where the 200-day ma and where the 55-week MA is also located.

To the upside, analysts at Commerzbank explained that EUR/GBP, last week, tested a dense band of resistance offered by the 55-day ma at 0.9012, the base of the cloud at 0.9025 and the 50% retracement at 0.9027 and it failed here. "Given the TD perfected set up on the daily chart, we continue to look for further weakness this week."